Salary negotiations are stressful and exciting. They represent the end of a long search and the beginning of a new professional relationship. To ensure everyone walks away from the table feeling satisfied, follow these four tips:
1. Perform industry research
Long before you enter into salary negotiations with a desirable candidate, before you even make the open position public, you need to do your due diligence. To have a good position at the negotiation table, you'll need to understand several things:
- The value of the position to your organization.
- The experience and skills required by the position.
- How your organization is situated in the market, compared to competitors.
- Potential regional variations in salary.
- The strength of your employer brand.
Combined, these data points will not only help you during negotiations but also in establishing your initial offer. At this stage, it may be worthwhile to settle on a maximum figure – the absolute most you could provide in compensation and still have the position remain valuable to your organization.
Keep in mind that the candidates you interview are likely doing their own research to bolster their own negotiating position. Good candidates know their worth and they will aim to get the best deal possible.
2. Use salary ranges
In addition to establishing a maximum compensation level, you should also choose a salary that lands toward the low end of the market. This number should still be competitive, however. Going too low is likely to drive away qualified candidates – and if someone does agree to a very low rate, they're not likely to stick around for very long.
A good way to develop a range is to consider different types of candidates. An individual who exceeds all of your requirements and has glowing recommendations will demand a higher salary than an individual with less experience. The more you can tie each salary within your range to your research, the better you will be able to defend your reasoning.
3. Appeal to candidate needs
Salary isn't the only thing you're negotiating for at the end of the interview process. Other factors include health insurance, vacation time, sick days, 401(k) matching and signing bonuses.
According to a 2016 report from Glassdoor, health insurance is the No. 1 benefit that impacts worker satisfaction. Therefore, if your organization isn't able to compete in terms of salary, you may be able to persuade candidates with more robust benefits.
Similarly, your organization's corporate culture can lure candidate away from the competition. For instance, a study from Bentley University found that 77 percent of millennials believe flexible hours create a more productive workplace. Offering work-from-home opportunities or later start times could encourage up-and-coming professionals to check out your company.
4. Keep things positive
Salary negotiations can be stressful for everyone involved. At the end of the day, however, everyone wants a fair deal. Employers should keep in mind that candidates may have been searching for a job for a while, which can be an emotional experience. Keep discussions professional, relaxed and grounded in market research.
An executive search firm can be a great ally to have as you prepare to negotiate salaries. Experienced search consultants have a thorough understanding of the market and they help to guide the process. To learn more, visit EBC Associates' employer resource center.